University of South East Asia

2014-2015

Exercise Chapter 10
Exercise 1
Listed below are transactions involving the bank reconciliation statement. Some
transactions require adjusting entries on the depositors books. Identify those that do
and prepare the appropriate adjusting entries.
1-Deposit in transit, $650
2-Bank charge for printing checks, $30
3-Incorrect entry of $440 on depositors records for a check for rent expense of $400
4-Erroneous bank charge of $70 against depositors account for check issued by
another company
5-Return of a customers check marked NSF for $80

Exercise 2
The records of XYZ Printing company showed the following for the month of April:
1-Cash balance per books-April 30, $15,000
2-Cash balance per bank statement April 30, $12,850
3-On April 30, the following checks were outstanding:
#510 $46
#541 $493
#547 $89
#601 $14
4-The following two customer checks deposited by XYZ were returned to the
company and were marked NSF:
ABC shirts $300
Sign Inc.
$840
5-A deposit of $3,100 was made on April 30 but was not included on the bank
statement.
6-The bank collected a $2,000 note for XYZ from the Uniform Company.
7-The bank service charge was $25.
8-The bank charged XYZ $527 in error.
Prepare a bank reconciliation as of April 30.
Lecturer: Hour Ry

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Exercise Financial Accounting

University of South East Asia

2014-2015

Exercise 3
For the month of January, smith Corporation had the following transactions relating
to the establishment of its petty cash fund:
Jan. 01

An impress petty cash fund of $300 was set up.

Jan. 31

The petty cash box contained $90 cash plus the following paid vouchers:

postage, $80 taxi fares.$60 office supplies $50 miscellaneous expense $20.
Prepare appropriate journal entries for the above information.
If in above exercise the cash on hand was $86 prepare the entry for the
reimbursement at January 31.

Exercise4
The Dara Co.ltds bank statement for October 2009 show the following data:
The cash balance per bank 31/10

$14,280

The Cash balance per book 31/10

$13,319

1-The NSF check was $175 from a customer.

2-The note collected by the bank was $500 ,three months, 12% , The bank charged a $10
collection fee. No interest has been accrued.
3-Outstanding checks at 31/10/09 total $2,410
4-Deposit in transit at 31/10/09 total $1,752
5-A Dara co, ltd check for $352 dated 20/10 cleared the bank on October 25 this check,
which was a payment on account, was journalized for $325.

Required:
A-Prepare a bank reconciliation at October 31.
B-Journalize the entries required by the reconciliation.

Lecturer: Hour Ry

14

Exercise Financial Accounting

University of South East Asia

2014-2015

Exercise 5
The Sara Co. ltds bank statement for October 2009 show the following data:
The cash balance per bank 31/10

$15,907.45

The cash balance per book 31/10

$11,589.45

1-The NSF check was $425.60 from a customer.

2-Service charge by the bank $30.
3-The note collected by the bank was $1,000, interest $50 , The bank charged a $15
collection fee. No interest has been accrued.
4-Out standing checks : checkN310 $3,000, checkN311 $1,400, checkN312 $1,504
5-Deposit in transit at 31/10/09 total $2,201.40
6-A Sara co, ltd check for $300 dated 20/10 cleared the bank on October 25 this check,
which was a payment on account, was journalized for $336.

A-Prepare a bank reconciliation at October 31.

B-Journalize the entries required by the reconciliation.

Exercise 2
Company
1
15,000
4
-1,140
6
2,000
7
-25
Lecturer: Hour Ry

Bank
2
12,850
3
3,100
5
-642
8
527
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Exercise Financial Accounting

University of South East Asia

15835
Company
13,319
1
-175
2
505
5
-27
13,622
Company
11,589.45
1
-425.6
2
-30
3
1035
6
36
12,214.85

2014-2015
15835
Exercise 4
Bank
14,280
3
-2,410
4
1,752
13,622
Exercise 5
Bank
15,907.45
4
-5,904
5
2,201.40

Exercise 1
The accountant for Vida Corporation was unable to prepare correctly the bank
reconciliation shown below. He has asked you to correct any mistakes that he has made and to
complete the bank reconciliation. And prepare the appropriate adjusting entries.
Vida Corporation
Bank Reconciliation
August 31, 2011
Balance per depositors book
7,540
Add: Deposit in transit
500
Bank error in crediting another
companys deposit to our account 100
600
8,140
Lecturer: Hour Ry

16

Exercise Financial Accounting

University of South East Asia

Deduct: NSF check
Outstanding checks
Adjusted balance

2014-2015
70
300

Balance per bank statement

Add: Note collected by bank
200
Check #107 for $300 applicable to
advertising expense was incorrectly
written in the checkbook as $330 30
Deduct: Transportation costs to and
from the bank
Adjusted balance

370
7,770
7,600

230
7,830
50
7,780

Exercise 2
Based on the information presented below, prepare a bank reconciliation for smith
Corporation at December 31, 2011
1-Balance per bank statement-December 31, 2011 $101,240
2-Balance per books-November 30, 2011 $87,000
3-Cash receipts for December 2011 $40,000
4- Cash payment for December 2011 $38,000
5-Outstanding checks-December 31, 2011
#108 for $12,000
#114 for $5,000
6-Received cash-December 31, 2011, $4,000; deposit on January 2, 2012
7-Return of $300 check, made out to Lakeside Corporation, by the bank on December
26, 2011, due to absence of countersignature
8-Incorrect entry on bank statement for December 16, 2011, deposit, $2,010; actual
deposit, $2,100
9-Erroneous charge for $200 against Smith Corporation account for check issued by
Stone Corporation
10-December 20, 2011: collection on a note receivable by bank for Smith Corporation,
$1,100, including in interest; collection charge, $20
11-Bank service charge for December 2011 per debit memorandum, $50
12-Erroneous debit memorandum of December 21, 2011, to charge the firms account
for settlement of a bank loan in which check #82 was issued on December 20 , 2011, $2,000
13-Incorrect credit to Smith Corporation account for December 14, 2011, Smart
Corporation deposit, $800.

Exercise 3
The following information is available for The Gant Company for 2011:
Freight-in
$20,000
Purchase returns
80,000
Selling expense
200,000
Ending inventory
90,000
Lecturer: Hour Ry

17

Exercise Financial Accounting

University of South East Asia

2014-2015
The cost of goods sold is equal to seven times the selling expenses, what is the cost of
goods available for sale?

Exercise 4
The following information pertains to a given product:
Jan 01
Inventory
15 units
Feb 14
Purchase
16 units
May 23
Purchase
25 units
July 18
Purchase
20 units
Aug 25
Purchase
30 units
Nov 09
Purchase
10 units
Selling information:
Feb
05
March 17
June 05
Oct
23
Dec 12

Sale
Sale
Sale
Sale
Sale

@
@
@
@
@
@

$20
22
25
23
18
21

10 units
15 units
20 units
30 units
25 units

The physical count of ending inventory reveals that 16 units are on hand.
Determine the cost of goods sold and the cost of inventory on hand by using periodic and perpetual
inventory system under
A-First-in, First-out ( FIFO )
B-Last-in, First-out (LIFO )
C-Average cost method.

Lecturer: Hour Ry

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Exercise Financial Accounting